By Rick Zambrano, Foodable Industry Expert
Surely Darden Restaurant’s senior management team and board of directors was quite surprised that Starboard Value (the hedge fund that owns about 8.8% of the Olive Garden owner restaurants) effectively managed a coup in October. The activist investor Jeff Smith, Starboard’s CEO, was able to replace the entire board and is now positioned to select the next CEO and implement sweeping changes at Darden’s Olive Garden restaurant and remaining mid- and upscale brands, including LongHorn Steakhouse and Yard House.
Many of these “sweeping” changes are observations that you’ll most likely find on many of the comment cards (if there were any) that customers volunteered after their visits to Darden’s legacy chains. For Darden, not listening to the customers and to investors for years sealed the fate of the outgoing leadership and board.
How to Listen to Your Customers
How do restaurant chains today listen effectively to customers in order to create a feedback loop and improve hospitality? And how can they incorporate customer feedback in all processes, including menu innovation? Customer feedback is essential in establishing a competitive brand. To continuously transform and update processes to run a great single restaurant or chain of restaurants is equally important. Here’s how:
- Solicit feedback, putting heavy weight on social media, and make customer feedback an essential part of your operational metrics.
- Take suggestions and see how they can be applied to the various functions, particularly culinary, marketing and purchasing functions.
- Catalog suggestions over time and scan online reviews daily.
- Be proactive in providing the best service possible.
Starbucks Coffee is an example of a chain that solicits customer feedback and makes it easy for its customers to provide suggestions and to open up discussions on nearly all of its social media channels, including Twitter and Google+. Communication from marketing departments of restaurant companies has long been a one-way street—now savvy restaurateurs are opening dialogue with customers. Whether this communication be on social media, or on their website or through apps that are designed to solicit and even reward customers for their comments and suggestions.
Consumers are Looking for Constant Dialogue, AKA the Feedback Loop
A post on Wharton School’s Knowledge blog from earlier in the year had some insight. It appears that although we are soliciting more feedback, the additional data doesn’t appear to be translating into a positive trend in service. The observation made is that customers don’t want a one-way conversation but look for a dialogue (a feedback loop). It might be great that you’re using the latest customer response app, but if that app or your process doesn’t allow for a dialogue or discussion, than you may not truly get the ROI on the technology. And customer service scores should always be part of the daily or weekly scorecard of a restaurant, allowing your restaurant to develop a trend line over time.
When I worked for a top five cafe-bakery chain, customer comments were passed along from marketing to the respective departments to see if they could address customer concerns. There was a hotline established for customer feedback, as well. Directors were responsible for directly addressing a concern, and if need be, directly responding to that customer. Chains today can go even beyond that by indexing those suggestions for future use. Also, they can use routine suggestions from regular customers to improve menus, save on food cost or develop new products. It’s great to have fan (crowd) sourced menu items, but if marketing takes a look at routine comments, they’ll most likely see suggestions that resemble many of today’s Facebook- and contest-generated rollouts. I recall our executive and R&D chefs readings specific guest suggestions that were received by our call center.
Cataloging suggestions, complaints and all types of feedback is helpful in establishing commonalities. Clarabridge and other technology companies provide solutions for archiving and intelligently using the feedback that comes to a restaurant company in all different formats. Score cards of yesterday were the tallies of complaints vs. compliments. Today’s scorecard might be an index or a color that reflects feedback on all solicited and unsolicited channels, such as Yelp and Google. From top-to-bottom, all managers are accountable for these suggestions. Having a system that helps share the data with all corporate stakeholders is helpful in interweaving customer response into better hospitality, future actions and strategic plans.
There is no natural solution for better customer service. Each restaurant company has to work hard to achieve this. Even at table-service restaurants, there is no easy play. The Wharton Knowledge blog above pointed out that tipping rates correlated poorly with service received at restaurants. Investing in the employee experience and creating financial incentives for employees to focus more deeply on the bigger customers (for a restaurant, the VIPs and the regulars alike) are ways to truly move the needle on service and hospitality.
Back to Darden, it's obvious that many a guest would have told management that they wanted a loyalty program, direct email offers, and at Olive Gardens– maybe less cold breadsticks. These are all suggestions that Starboard Value, the activist investor, has made (which many have read by now) and will now be presumably implemented at Olive Garden, LongHorn Steakhouse, Yard House, etc. The next time a large public restaurant company doesn’t strive to prioritize a guest feedback loop for better hospitality and performance, managers may want to start looking over their shoulder and polishing their resumes.